Bitcoin and other cryptocurrencies suffered another massive downfall over the weekend, on November 24th. BTC/USD crashed below $4,000 and hit a low of $3,456. Digital coins gradually staged a recovery worth around 30% with BTC topping $4,400 at one point. However, this recovery did not turn into a comeback.
At the time of writing, Bitcoin is back below $4,000. What are the next moves? It is hard to tell. The only sure thing is that volatility has returned and will likely stay for a while.
One of the reasons for the recovery was the news that Coinbase, one of the world’s leading crypto-exchanges, announced it would launch an Over-The-Counter service in addition to its crypto-exchange. The OTCservice will allow institutional traders to trade vast amounts of digital coins without having a massive impact on the price.
NASDAQ is also reportedly moving forward with its crypto projects despite the recent downturn in the price.
These developments support the theory of “dumping to accumulate.” in which whales are dumping some coins to lower the price and then accumulate more afterward. The speculation continues.
Another piece of good news came from the US state of Ohio which now accepts Bitcoin as a means of payment for 23 different types of business taxes.
Not everything was good news. News about cryptocurrencies entered the mainstream after it became known that US authorities are investigating Floyd Mayweather and DJ Khaled in relation to their involvement in Initial Coin Offerings (ICO’s). The US authorities have upped their game around this issue.
It is important to remember that the crypto-sphere is still scarred by the hard fork in Bitcoin Cash. The “hash wars” do not top the talk in blockchain world, but they still weigh on the price.
And, markets are still awaiting an Exchange Traded Fund (ETF) for Bitcoin. An ETF is critical to attracting mainstream funds to the cryptocurrencies. Prices have moved quite a bit on any delay, rejection or hope for an approval. See: Bitcoin ETF explained: 9 questions and answers about the critical crypto catalyst
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BTC/USD Technical Analysis
The Relative Strength Index on the daily chart shows is just around 30 at the time of writing. A fresh drop below this level indicates oversold conditions. The RSI only temporarily left these levels after two weeks of non-stop selling that did not trigger an imminent bounce. So, it should be taken with a pinch of salt. Momentum is still to the downside.
$3,830 capped BTC/USD temporarily when it attempted recovery in late November. $3,670 was the initial low after Bitcoin lost $4,000. $3,456 is the lowest level since September 2017. $3,000 looms below.
Looking up, the swing low of $4,050 seen in mid-November switches positions to resistance. $4,400 was swing high in the recent recovery. $4,600 served as resistance after the loss of $5,000. $5,000 and $5,200 are next.
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